NECESSITY,
FUNCTION, AND CONFORMITY: EO 2004-726, effective July 9, 2004, reorganized the
Cabinet for Health Services and placed the Department for Medicaid Services and
the Medicaid Program under the Cabinet for Health and Family Services. The
Cabinet for Health and Family Services has responsibility to administer the
program of Medical Assistance in accordance with Title XIX of the Social
Security Act. KRS 205.520(3) empowers the cabinet, by administrative
regulation, to comply with any requirement that may be imposed, or opportunity
presented, by federal law for the provision of medical assistance to Kentucky's
indigent citizenry. This administrative regulation sets forth the principles
relating to nonduplication of payment and treatment of third-party liability
for medical services, made available to both the categorically needy and the
medically needy.

Section 1.
Nonduplication of Payment. Nonduplication of payment as required by 42 CFR
447.15 is assured as follows:

(1) When a
recipient makes payment for a covered service, and the payment is accepted by
the provider as either partial payment or payment in full for that service, no
responsibility for reimbursement shall attach to the cabinet and no bill for
the same service shall be paid by the cabinet.

(2) When the
cabinet makes payment for a covered service and the provider accepts the
payment made by the cabinet in accordance with the cabinet's fee structure, the
amounts paid shall be considered payment in full; and no bill for the same
service shall be tendered to the recipient, or payment for the same service
accepted from the recipient.

Section 2. Third-party
Liability. The requirement contained in 42 CFR Part 433, Subpart D that any
third-party liability be considered as a resource is met as follows:

(1) When payment
for a covered service is due and payable from a third-party source such as
Medicare, an insurance plan, or some other third-party with a legal obligation
to pay, the amount payable by the cabinet shall be reduced by the amount of the
third-party obligation.

(2)
Notwithstanding the provisions of subsection (1) of this section, the cabinet shall,
in accordance with the provisions of 42 CFR 431.625, make no payment on behalf
of any person of an amount payable under Title XVIII, Part B, Supplementary
Medical Insurance (SMI), whether or not the SMI eligible recipient has enrolled
in and paid the premium for participation in the insurance plan. (Recodified
from 904 KAR 1:005, 5-6-86; Am. 17 Ky.R. 148; eff. 9-13-90.)